Do You Adopt For Money? Or Do You Adopt For Love?

 
Think Our Children Are Not Being Sold!

  3:28 PM Posted In Michigan Department of Human Services , Michigan DHS Edit This And we wonder why our nation is going broke. Do you adopt for money?
Or do you adopt for love?

SMITHFIELD, N.C. (CNNMoney) -- The Wards couldn't believe the news
when their tax preparer called to tell them they're getting a $54,000
refund this year.

Thelma Ward was speechless. She had to hand the phone to her husband
so she could dance around the living room floor in shock.

"I was thanking God like never before," she said.
"We're just overwhelmed -- that amount was so huge it was
unbelievable."

Even their tax preparer said she had to check the math -- 10 to 15 times.

"We couldn't believe it when we totaled everything up. We were like,
that can't be right," said Dee Carter, owner of the local H&R Block
where the Wards have brought their taxes for more than 10 years. "We
had never seen anything like it before, so we had to check it over and
over again."

So what's bringing this windfall? The federal adoption tax credit.

In the past few years, the Wards have expanded their already big clan
of seven children by adopting five new kids. For each of these adopted
children, they are eligible for a one-time tax credit of up to
$13,170.

The credit has been around since 1997, but this tax season it is
refundable for the first time -- which is the tax equivalent of
hitting the jackpot.

A refundable tax credit lets you get the cash even if you owe no
taxes. A non-refundable credit just offsets any taxes you owe, and
then rolls anything remaining to the next tax year.

The Wards adopted the five children over a span of three years, so
they've filed for the tax credit each year. But because they didn't
make enough money, the tax credit simply rolled over from year to year
and accumulated.


This year, because the credit became refundable, they are getting all
the previous years' leftovers in a lump sum. (The couple had an
earlier adoption, in 2004, but unused credits can only be carried for
up to five years.)

While the Wards haven't received the refund check yet, H&R Block
calculated that the unused adoption credits from the past five years
add up to $45,560 -- making up the majority of the $54,000 refund
they're expecting.

"When this was first coming through the tax reform legislation, we
just kept looking at it going, 'Wow, this is really, really
significant for people adopting,'" said Kathy Pickering, executive
director of The Tax Institute at H&R Block. "It's not a large
population who can claim it, but for those who do, it can really
change their lives."

A typical private adoption runs about $30,000, so the credit was
intended to help families by reimbursing expenses, such as court fees.
But the tax law allows parents who adopt "special needs" children to
receive the entire credit even if they had no expenses.

All of the Wards' foster children qualified as special needs, so
Thelma was able to claim the full credit even though there were no
adoption expenses. This is not unusual for foster children; about 80%
of these kids are considered to have "special needs."

They tried to deduct what?!
"People adopting from the foster-care community are typically lower
and moderate income, and most don't have a significant tax liability,
so the credit never helped them," said Mary Boo, assistant director of
the North American Council on Adoptable Children. "The expenses they
have are life-long, so the government really stepped up this year to
help these people."

It's significant to the Wards, who only make about $39,000 per year.

"We didn't get into foster care to adopt anyone, but when we started
being foster parents we couldn't let a child leave us without a place
to call home," said Thelma.

She had to quit her job at a daycare to take care of her new children.
And her husband, David, who works at a concrete company, had to take a
significant pay cut last year to keep his job. The one saving grace:
As foster parents, they receive about $3,300 a month from the state of
North Carolina until the children turn 18.

"Any little bit helps, but it still doesn't cover it," said Thelma,

who has had to learn to stay on a tight budget to afford giving her

children the care they need.

Kelli, only three years old, has a serious heart condition and has
required medical attention since she was born. She is scheduled for a
major heart surgery this month.

7 best apps for filing taxes
Octavius has a heart murmur and is in and out of the doctor's office
constantly. And all of them -- including Joquavius, Zoie and Mckayla
-- require either speech therapy, psychiatry or special classes for
learning disabilities.

This attention really adds up, both emotionally and financially. So to
save money, Thelma focuses on the little things, like using coupons
everywhere she can, selling her children's clothes at consignment
stores, buying everything used and holding yard sales.

While the kids are at school, Thelma goes to three grocery stores to
do her weekly shopping. But the family's weekly grocery bill still
totals around $400, including the more than three gallons of milk and
four loaves of bread the children go through. It usually takes five or
six trips to the car to get all the groceries unloaded.

The Wards hope to use their windfall refund to take their big family
on a vacation, pay bills, and buy new windows for their home -- which
needs a little repair after housing so many foster children over the
past years.

"We'll have to see what we can afford," said Thelma. "Money comes and
money goes, so we want to make sure we spend it all wisely."

Many more families are also finding themselves in the enviable place
of planning what to do with such a windfall. Tax preparer H&R Block
said 8,000 of its own clients have already claimed the credit, and the
company expects 150,000 total taxpayers to claim it this year.

How I'll spend my refund
That's a 50% jump from the 2009 tax year -- but not because adoptions
have increased that much. Instead, many people who had no tax
liability in previous years, and thus wouldn't have been helped by the
credit, are now filing. And some of the refunds it has seen range as
high as $90,000.

A couple from Alabama, Tina and Kenny Thomas, recently adopted five
kids from foster care and are now expecting a check for a whopping
$65,000, thanks to this credit. Like the Wards, they had absolutely no
idea it existed until they went to their tax preparer.

"We went in having no clue about the credit, and we even thought we
may have to pay money," said Tina Thomas. "We never, never would have
expected it."

But before you run out to adopt a child in order to cash in on this
credit, know that the IRS is a stickler for documentation and isn't
doling out refunds like this to just anyone.

"If you're claiming the credit because of the nature of the credit and
the size of the refund, there are many documentation requirements that
Congress included along with it," said Eric Smith, a spokesman for the
IRS. "It is a generous credit for those who qualify -- that's why
policymakers want to make sure the people who deserve it get it, and
those who don't, don't.

http://abusedswanblogger.blogspot.com/2011/04/think-our-children-are-not-being-sold.html

Tina And Kenny Thomas......Where's My $65,000 Tax Refund?

NEW YORK (CNNMoney) -- Tina and Kenny Thomas filed their taxes in February and are still waiting for their refund.
The Thomases are expecting a whopping $65,000 check from the IRS this year, thanks to the adoption tax credit they claimed after adopting five special needs children from foster care over the past few years.
The refund was supposed to arrive on May 3, according to the "where's my refund?" tool on the IRS website. They're still waiting for a check.

The family is buying a home in foreclosure for $55,000 and agreed to pay cash with their refund. But the check didn't arrive by their closing date. They've already extended the closing date once, but if they don't get the money by June 13, they may lose the house.
"We are frustrated because [the IRS] knows they owe it," said Tina. "If we owed them, they would be charging us hundreds of dollars in interest. It's a lot of money so it seems like they're trying to prolong it as much as possible."
While the couple finally received about $5,000 -- the portion of their refund that doesn't include the adoption credit -- they have yet to see the bulk of the money.
Thousands of other Americans who adopted children over the last five years and filed for the adoption credit are in limbo as well, waiting for similarly large sums from the IRS. The adoption tax credit gives parents who adopt children as much as $13,170 per child -- up from a cap of $12,150 last year. And this is the first year the credit is refundable, meaning the money goes directly into a qualifying taxpayer's pocket, rather than being applied to future taxes owed.
That's especially helpful for lower income families because they get the cash even if they don't owe any taxes.
A typical private adoption runs about $30,000, so the credit was intended to help families by reimbursing expenses, such as court fees. Parents who adopt children with special needs, however, can receive the entire credit even if they had no expenses.

But because of the huge amounts of money adoptive parents are claiming this year, the IRS is being extra vigilant before it doles out thousands of dollars.

They tried to deduct what?!

Andrew Long and his wife still haven't received the $67,000 refund they say they're owed, after adopting four children with special needs last year.
"The new adoption refund is going to be very helpful, once the IRS decides to give it to us," said Long.
The Longs recently received a check for about $12,000 -- the portion of the refund that didn't include the adoption tax credit. But they have yet to see the remaining $55,000.
Playing the waiting game
In its latest report on the tax filing season, the Treasury Inspector for Tax Administration found that, by the end of April, the IRS had received returns from 72,656 taxpayers claiming more than $897 million in adoption credits. About 58% of those claims were sent for further review, and will be audited to verify that proper documentation was submitted and that the amount of money being claimed is correct.
The IRS didn't provide an average timeframe for resolving these additional examinations.
Long said the IRS sent him multiple letters asking for the same paperwork he had already attached to his original return in February. After re-sending the documents in April, he said his tax refund status online still hasn't budged from "under review."

When he called to see what was going on, he said a representative told him that all adoption credit returns are being audited this year.

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The IRS has acknowledged the issue, but says the delays are largely coming because taxpayers are filing improper paperwork or are missing documents.
"We recognize what an important credit this is for people who are adopting, since the dollar figure on this one compared to other refundable credits is very large," said IRS spokesman Terry Lemons. "But we have people who are trying to game the system all the time, so we're kind of stuck in the middle -- we know parents are counting on this money, but we're also trying to make sure each claim truly qualifies."
This may explain why parents like Deborah Schwinger, the new mother of two adopted siblings, have been left in the dark. Schwinger also claimed the adoption credit, and said she's supposed to get $24,300 back from the IRS. She received the part of her refund excluding the adoption credit, and says the IRS continues to send her letters notifying her of further delays.
"No adoptive parents, that I know, have actually gotten the money -- everyone's return is being reviewed or delayed," she told CNNMoney. "I think many people may give up."

As they wait, many confused and angry adoptive parents across the country are flocking to an online forum on Adoption.com. A thread dedicated to the issue contains 85 pages filled with comments about refund delays.

But some families are winning the waiting game. The Wards, from Smithfield, North Carolina, were one of the few families that have received a refund from the adoption credit -- totaling $54,000 -- after adopting five kids over the past five years. They've been waiting since January, when they filed their return.
To claim the credit, taxpayers are required to file a paper return, instead of filing electronically. And they must attach documentation, including an adoption order or decree. The IRS says it typically takes six to eight weeks to receive a refund if the taxpayer has submitted a proper return.
But to those parents whose refunds are being delayed because of the intense screening process, Lemons said the IRS apologizes.
"This doesn't help out the people who claimed the credit and who deserve it ... we're sorry this is taking some time for those caught up in this," said Lemons. 




http://money.cnn.com/2011/06/02/pf/taxes/adoption_tax_credit_refund_delay/